Taxes placed on profits from the sale of investments or real estate.
Capital improvement
An improvement that increases the value of a piece of property.
Capital lease
Rental where the lessee obtains major property rights from the lessor although not legally a purchase of the property.
Capital loss
Loss from an investment resulting from the sale of that real estate.
Capital recapture
Return of invested principal, excluding earned income or collection of a previously written-off bad debt.
Capital recovery
Amount of an investment, made in real estate, which is recovered.
Capital turnover
Number of times a given amount of capital assets turn over to generate sales over a given period of time.
Capitalization
Mathematical formula used by investors to compute the value of a property based on net income.
Capitalization rate
The percentage rate of return estimated from the net income of a piece of property.
Capitalize
Recording of an expenditure having a benefit of more than one year to the cost of a property such as a new kitchen or new roof. Upon sale of the property, the gain or loss, for tax purposes, is the difference between the selling price and the adjusted cost basis. If used for business, depreciation on the capital improvements may be deductible for tax purposes.
